We have a distribution problem, not a production problem
The average person is 14x wealthier today, compared to 200 years ago.
If wealth were distributed equally, everyone would live above the poverty line.
But wealth is not distributed equally. The richest 1% of the world population receive 19.5% of income.
We have reached a point where we have enough to meet everyone’s basic survival needs, but there are still people living in poverty.
This is not a production problem. It’s a distribution problem.
The average person is 14x wealthier today, compared to 200 years ago
In 1823, the world population was 1.11 billion.
In 2019, the world population was 7.76 billion.
In 1820, the world GDP was $1.2 trillion (in international-$ in 2011 prices).
In 2015, the world GDP was $108.12 trillion (in international-$ in 2011 prices).
In the past 200 years, the world population has grown roughly 7x and the world GDP has grown roughly 100x.
GDP growth has outpaced population growth.
As a result, GDP per capita has grown.
The average person is roughly 14x wealthier today, compared to 200 years ago.
If wealth were distributed equally
If the 2015 world GDP were divided equally among the 2019 world population, then each person would get roughly $13,933 per year.
$108.12 trillion / 7.76 billion = $13,932.9897 per person per year
Everyone would live well above the global poverty line
In 2022, the World Bank updated the global poverty line from $1.90 per person per day to $2.15.
$2.15 x 365 days in a year = $784.75 per person per year
This figure is much lower than the poverty line in the U.S.
As of 2023, the poverty line in the U.S. for a single person is $14,580 per year.
If wealth were distributed equally, every person in the world would have more than 17x the global poverty line.
$13,932.9897 / $784.75 = 17.75x
If we use the U.S. poverty line instead of the global poverty line, every person would be almost exactly level with the U.S. poverty line, if wealth were distributed equally.
But wealth is not distributed equally
In 2021, the richest 1% of the world population received 19.5% of income and the poorest 50% received 8.1% of income.
If wealth were distributed equally, everyone would have enough.
But it’s not distributed equally.
We have a distribution problem, not a production problem
Thanks to economic progress, we have reached a point where we have enough to meet everyone’s basic survival needs.
Yet, there are still people living in poverty.
This is not a problem of production.
It’s a problem of distribution.
In my head, the simplified reason for why income production is not well distributed to low income countries is that extractive colonization have prevented them from having job opportunities (or from having the value added exports needed to support jobs). Income stream isn't like wealth where you can just move it around.